By Choi Sung-jin
The top 10 percent of wealthy people garnered more than 90 percent of interest and dividend income, indicating the concentration of wealth is more severe in unearned income than in earned income, a lawmaker said Monday.
According to data the National Tax Service provided to Rep. Park Kwang-on of the opposition Minjoo Party of Korea, interest income of an average 2.99 trillion won ($2.63 billion) accrued a year between 2011 and 2014. The richest 10 percent of people took 2.73 trillion won, or 91.3 percent of the total.
Also, out of the annual dividend income of 1.61 trillion won on annual average, the top 10 percent took 1.51 trillion won, or 93.7 percent of the total.
Interest and dividend income are capital income, typical unearned income. Interest is generated by bank deposits and installment savings and dividend income comes from stock ownership. The data show that although many people maintain various savings accounts as the easiest way of building assets, only wealthy people take sizable income from them. Likewise, almost all dividend income goes to large shareholders.
The concentration of unearned income was more serious than that in earned income from wages and salaries. During the same period, the top 10 percent took 16.11 trillion won in earned income, accounting for 75.4 percent of the total earned income of 21.36 trillion won.
The unequal distribution of wealth was also manifest in real estate holdings.
Out of the total 1.24 trillion won in annual average comprehensive real estate tax payments, the richest 10 percent paid 1.09 trillion won, accounting for 87.7 percent. The aggregate real estate tax, the so-called tax on wealthy property holders, is imposed on only people with a home valued at 600 million own or more and land worth 500 million won or more.
The top 10 percent wealthy people also paid 6.22 trillion won in capital gains tax _ imposed on sellers of land, buildings and securities _ or 83.1 percent of the total 7.48 trillion won on the annual average. The two property taxes also target unearned income.
"All these data indicate the concentration of wealth is becoming increasingly severe in Korea," Rep. Park said. "The time has long past for the government to reconsider seriously its financial and taxation policies for greater economic equity."
The top 10 percent of wealthy people garnered more than 90 percent of interest and dividend income, indicating the concentration of wealth is more severe in unearned income than in earned income, a lawmaker said Monday.
According to data the National Tax Service provided to Rep. Park Kwang-on of the opposition Minjoo Party of Korea, interest income of an average 2.99 trillion won ($2.63 billion) accrued a year between 2011 and 2014. The richest 10 percent of people took 2.73 trillion won, or 91.3 percent of the total.
Also, out of the annual dividend income of 1.61 trillion won on annual average, the top 10 percent took 1.51 trillion won, or 93.7 percent of the total.
Interest and dividend income are capital income, typical unearned income. Interest is generated by bank deposits and installment savings and dividend income comes from stock ownership. The data show that although many people maintain various savings accounts as the easiest way of building assets, only wealthy people take sizable income from them. Likewise, almost all dividend income goes to large shareholders.
The concentration of unearned income was more serious than that in earned income from wages and salaries. During the same period, the top 10 percent took 16.11 trillion won in earned income, accounting for 75.4 percent of the total earned income of 21.36 trillion won.
The unequal distribution of wealth was also manifest in real estate holdings.
Out of the total 1.24 trillion won in annual average comprehensive real estate tax payments, the richest 10 percent paid 1.09 trillion won, accounting for 87.7 percent. The aggregate real estate tax, the so-called tax on wealthy property holders, is imposed on only people with a home valued at 600 million own or more and land worth 500 million won or more.
The top 10 percent wealthy people also paid 6.22 trillion won in capital gains tax _ imposed on sellers of land, buildings and securities _ or 83.1 percent of the total 7.48 trillion won on the annual average. The two property taxes also target unearned income.
"All these data indicate the concentration of wealth is becoming increasingly severe in Korea," Rep. Park said. "The time has long past for the government to reconsider seriously its financial and taxation policies for greater economic equity."
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